A blawg containing a periodic review of topics of interest in corporate and commercial law that impact India

Sunday, June 21, 2015

Personal Liberty vs. Public (Financial) Interest

In the prolonging Sahara saga, following
a contempt action initiated by SEBI last year the Supreme Court ordered
judicial custody for Mr. Subrata Roy Sahara and certain other individuals. This
is on account of their failure to comply with a previous judgment of the
Supreme Court that orders two Sahara companies to repay monies to investors
obtained in violation of various securities laws. Although the Court had
granted interim bail to these individuals, the conditions pertaining to the
bail have not been fulfilled due to which they remain in judicial custody. By
way of a judgment
issued on June 19, 2015, the Supreme Court set new terms of their release on
bail, including requiring Sahara to furnish a guarantee on agreed terms.

Of relevance for the present post are
not the Supreme Court’s conclusions, but its engagement with a certain policy
tension, namely conflicting pressures relating to personal freedom of the
individuals concerned weighed against the public interest (which presumably
refers to the impact of their actions on the financial markets and the
investing public). In its order, the Court quite explicitly confronted the
policy conflict and sought to address it. This is best appreciated in the Court’s
own words in a lengthy paragraph, which is extracted below:

This Court feels
concerned with the fact that three persons are deprived of their liberty for
the last fifteen months and this situation is quite onerous to them. On the
other hand, public interest as well as public good demands that the two Sahara
Companies, which had collected whopping amount of more than [Rupees] 22,000
crores from the public in an illegal and unauthorised manner, are made
accountable for the same .... By any yardstick, this is a huge liability, which
the contemnors are bound to discharge by depositing the same with SEBI. It is,
thus, an unprecedented situation of personal liberty of the three applicants on
the one hand vis a vis majesty of law and ensuring larger public good, on the
other hand. It is this sense of justice, in an unprecedented kind of situation,
that has compelled the Court to take such an extreme step. It is this legal
realism which has compelled the Court to adopt an approach which sounds more
pragmatic. It is “doing what comes naturally” approach to the problem at hand,
which required such a drastic step, going by the experience of this case,
giving rise to 'Reflection' that provided 'Understanding'. This case is a
burning example where the true dictate of justice is difficult to discern, and
the law needed to come down on the side of practical convenience. We may borrow
the jurisprudential theory propounded by Ronald Dworkin, albeit in somewhat
different context, viz. the “conventional jurisprudential wisdom” which holds
that in certain cases of a particularly complex or novel character the law does
not provide a definite answer. In denying that judges in hard cases have a
discretion to determine what the law is, Dworkin has instead argued for the
judicial use of public standards or principles in a way that is capable of
providing the right legal answer. The process of reaching a right answer in
hard cases obviously differs from the process of reaching the legal answer in
easy cases. After all, the avowed objective of rule of law is also to ensure
that the orders of this Court are respected and obeyed. Therefore, [it is] a
classic case where the approach adopted is influenced by the necessity of
“making the law work”. Therefore, the orders passed may not be strictly construed
as arising out of contempt jurisdiction, but in exercise of inherent
jurisdiction vested in this Court to do complete justice in the matter and to
ensure that the applicants render full compliance of its orders. It's the
unprecedented situation which has led to passing of unprecedented, but
justifiable, orders.

Pragmatism trumps legal doctrine. The
Supreme Court has repeatedly stressed the “unprecedented” nature of the
situation, and hence it decided to exercise its inherent jurisdiction to adopt
a practical approach as opposed to resorting to legal reasoning.

The line of reasoning followed , and the resultant view the SC has taken, very rightly so, as understood, should more than sufficiently inspire and influence, and give the necessary impetus, to the government to resort to an ideally pragmatic line of ‘thinking’ and policies, courses of action, legislation, so on, to be adopted. To be precise, it is , though late in the day, for the government/ its empowered authorities to sit up and accord a righteous thinking, to the end of drawing purposeful conclusions. In doing so, as underlined by the apex court in its judicial wisdom, anything done or omitted to be done, as ‘public servants’, must, in the ultimate analysis, stand up to and satisfy the test of the basic objective of promoting and achieving profoundly ‘the common good’ of THE PEOPLE. In other words, a rethinking is called for on the emphasis wrongly being laid on ‘penalty’, ‘punishment’, ‘prosecution’, and the like , that are lately being given undue emphasis, which time and again have infallibly gone to prove/turned out to be ineffective, or having no ‘deterrent’ effect at all as intended, so as to bring about or usher in any improvement, in the obtaining and continuing scenario for long .On the foregoing facets of life , impacting the humanity at large, the reflections made with remorse, of a renowned social thinker of our times, rich in soulful wisdom, as given vent by ‘Nani’ , in his published speaks and writings, might fittingly serve as a useful guidance, and provide the righteous direction to take, in all such fundamentally ‘socioeconomic' matters.An instance of a recent origin is the Regulatory Bill 2013 , for the thus far- admittedly- remaining unregulated for decades - Realty sector; even a cursory glance goes to show there are quite many punitive /deterrent provisions, with no emphasis at all on the need to bring about any improvement worth a mention as widely clamored for, for long, by the directly concerned / aggrieved people .

contd.>To Dilate (by way of clarifying and sharing own thoughts, in quest of looking for and finding clues, f any ) :Following is extract, of relevance) from the Judgment:QXtractsIn its order, the Court quite explicitly confronted the policy conflict and sought to address it..... extracted below:

This Court feels concerned with the fact that three persons are deprived of their liberty for the last fifteen months and this situation is quite onerous to them. On the other hand, public interest as well as public good demands that the two Sahara Companies, which had collected whopping amount of more than [Rupees] 22,000 crores from the public in an illegal and unauthorised manner, are made accountable for the same .... .. It is, thus, an unprecedented situation of personal liberty of the three applicants on the one hand vis a vis majesty of law and ensuring larger public good, on the other hand. It is this sense of justice, in an unprecedented kind of situation, that has compelled the Court to take such an extreme step.... This case is a burning example where the true dictate of justice is difficult to discern, and the law needed to come down on the side of practical convenience. We may borrow the jurisprudential theory propounded by Ronald Dworkin, albeit in somewhat different context, viz. ... Dworkin has instead argued for the judicial use of public standards or principles in a way that is capable of providing the right legal answer. The process of reaching a right answer in hard cases obviously differs from the process of reaching the legal answer in easy cases. After all, the avowed objective of rule of law is also to ensure... a classic case where the approach adopted is influenced by the necessity of “making the law work”. Therefore, the orders passed may not be strictly construed... but in exercise of inherent jurisdiction vested in this Court to do complete justice in the matter and to ensure that the applicants render full compliance of its orders....

Pragmatism trumps legal doctrine. The Supreme Court has repeatedly stressed the “unprecedented” nature of the situation, and hence it decided to exercise its inherent jurisdiction to adopt a practical approach as opposed to resorting to legal reasoning.

UQWprt the short comment on the Real Estate Bill 2013, the quite possible, rather inevitable. prolongation and delay of minimum of a few years, perforce foreseen in having the provisions of the Bill, after its final enactment, given a start for implementation, looms large and in a way, obscures vision.Q On delay, we, as a nation, have some fine qualities but a sense of the value of time is not one of them. Perhaps, there are historical reasons. Ancient India had evolved the concepts of eternity and infinity. So what do years wasted in a litigation matter against the backdrop of eternity. Believing in incarnation, what does it matter if you waste this life. You will have many more lives in which to make good. Our cases drag on over a length of time which makes eternity intelligible The law may or may not be an ass but is certainly a snail; cases proceed at a pace as unduly slow in a community of snails. Justice has to be blind but I see no reason why it should also be lame; here it just hobbles along, barely able to walk.

UQ

(A narration from Palkhivala’s published speech (1987) - The Judiciary and the Legal Profession, the Book- We, the Nation THE LOST DECADES)

The above quote, random selected among many more of the kind in like vein, though mainly aired in reference to the realm of tax administration and adjudication, may be seen to equally hold good and of every relevance in respect of any other than tax.

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